Dozier Company produced and sold 1,000 units during its first month of operation
ID: 2565067 • Letter: D
Question
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:
Direct materials $ 71,000
Direct labor $ 36,000
Variable manufacturing overhead $ 15,800
Fixed manufacturing overhead 28,600
Total manufacturing overhead $ 44,400
Variable selling expense $ 12,400
Fixed selling expense 18,800
Total selling expense $ 31,200
Variable administrative expense $ 4,200
Fixed administrative expense 25,400
Total administrative expense $ 29,600
Required:
1. With respect to cost classifications for preparing financial statements:
a. What is the total product cost?
b. What is the total period cost?
2. With respect to cost classifications for assigning costs to cost objects:
a. What is total direct manufacturing cost?
b. What is the total indirect manufacturing cost?
3. With respect to cost classifications for manufacturers:
a. What is the total manufacturing cost?
b. What is the total nonmanufacturing cost?
c. What is the total conversion cost and prime cost?
4. With respect to cost classifications for predicting cost behavior:
a. What is the total variable manufacturing cost?
b. What is the total fixed cost for the company as a whole?
c. What is the variable cost per unit produced and sold?
5. With respect to cost classifications for decision making:
a. If Dozier had produced 1,001 units instead of 1,000 units, how much incremental manufacturing cost would it have incurred to make the additional unit?
Explanation / Answer
Solution:
1a. The total product cost is computed as follows:-
Direct Material
$71,000
Direct Labor
$36,000
Total manufacturing overhead
$44,400
Total product cost
$151,400
1b. The total period cost is computed as follows:-
Total selling expense
$31,200
Total administrative expense
$29,600
Total period cost
$60,800
2a. The total direct manufacturing cost is computed as follows:-
Direct Material
$71,000
Direct Labor
$36,000
Total direct manufacturing cost
$107,000
2b. The total indirect manufacturing cost is computed as follows:-
Variable manufacturing overhead
$15,800
Fixed manufacturing overhead
$28,600
Total indirect manufacturing cost
$44,400
3a.
Total manufacturing cost
$151,400
3b.
Total nonmanufacturing cost
$60,800
3c.
Total conversion cost
$80,400
Prime cost
$292,600
3a. The total manufacturing cost is computed as follows:-
Direct Material
$71,000
Direct Labor
$36,000
Total manufacturing overhead
$44,400
Total product cost
$151,400
3b. The total nonmanufacturing cost is computed as follows:-
Total selling expense
$31,200
Total administrative expense
$29,600
Total nonmanufacturing cost
$60,800
3c. The total conversion cost is computed as follows:-
Direct Labor
$36,000
Total manufacturing overhead
$44,400
Total conversion cost
$80,400
4a. The total variable manufacturing cost is computed as follows:-
Direct Material
$71,000
Direct Labor
$36,000
Variable manufacturing overhead
$15,800
Total variable manufacturing cost
$122,800
4b. The total amount of fixed cost for the company as a whole is computed as follows:
Fixed manufacturing overhead
$28,600
Fixed selling expense
$18,800
Fixed administrative expense
$25,400
Total fixed cost
$72,800
4c. The variable cost per unit produced and sold is computed as follows
Direct Material
$71,000
Direct Labor
$36,000
Total variable manufacturing overhead
$15,800
Variable selling expense
$12,400
Variable administrative expense
$4,200
Total variable cost
$139,400
Number of units produced and sold
1,000
Variable cost per unit produced and sold
139.4
5a. The incremental manufacturing cost is computed as follows
Direct Material
$71,000
Direct Labor
$36,000
Variable manufacturing overhead
$15,800
Total incremental cost
$122,800
Number of units produced and sold
1,000
Incremental cost per unit produced
$122.8
Direct Material
$71,000
Direct Labor
$36,000
Total manufacturing overhead
$44,400
Total product cost
$151,400
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